Market Update - June 2026

0:02Hey everyone, Rob B here with Rob D and you are listening to The Property Podcast. This week's market update, there's so much happening in the market right now. Everyone wants to know what is happening and what will happen next and we give you exactly that in this week's episode.

0:21Yes, welcome to The Property Podcast. Thank you for joining us. In case you don't know, we run a business that helps our clients buy over£100 million worth of property every year. You can find out about that at propertyhub.net. And as a result of being in the market every day, we see it all. And so we can bring you not just the headlines, but the stories behind the headlines. And that's what we're going to do in this episode. So let's kick off with our first story. And the first story is all about migration. And it's from the Office of National Statistics. But stay with us because this is important.

0:50And that's why it's our first news story of the day, because this impacts us all. and it impacts property prices as well. So Rob, with migration crashing by 48%, what does that mean? Why are we leading with this story? Why is it so important? Well, it's super interesting because this number used to be at pretty much a million a couple of years ago. So it hasn't just fallen by 48 % since last year. Last year itself was significantly lower than the year before. So it peaked around about 2022, 23. Net immigration was a massive story and obviously the more people there are in the country the more people there are needing homes so it affects both house prices and rents so whatever you're seeing figures about the number of homes that we need to build and the government is setting targets net migration the population of the country is of course a big input factor into well how much do we need to build now the interesting thing here i think is going to be the effect on rents rather than house prices because if you go a level deeper and you look at what's driven this decline the main source of decline is people arriving on study related visas where it says there's been a drop of approximately 70 and if people are arriving to study well chances are they're going to be renting rather than buying and chances are they weren't necessarily somebody who was planning to stay in the country for the long term so i don't think rob we can overfit from one year's data or come to any firm conclusions but I think if you had to guess what the primary impact of this was going to be if we see one it's probably going to be on the rental market.

2:21I couldn't agree more Rob this will not make any meaningful difference if any difference to property prices one year's worth of data. We've had like you've said some massive numbers over the last few years and we're still living with the impacts of that but it is the rental market that is impacted because even if it's led by students or not, when people come to the country, the majority, not all, but the majority of people when they first move here look to rent. But of course, students even more so. So where this could impact the data is over the last few years, we've seen a rental boom, rental prices going up and up and up in excess of inflation.

3:03And that's because rents, the way they're priced, it's a lot more simplistic compared to property prices. Yes, supply and demand does influence property prices, but that's just one part of a big potion. There's lots of things that go into what moves house prices in the UK, borrowing rates, access to credit, sentiment, supply and demand, the list goes on. But with rents, it's a lot more simplistic. It's the amount of people versus the amount of property. And that's pretty much it. It's true supply and demand. So if you have less people coming into the country, therefore less people competing for rental properties, you would expect that the rental boom that we've seen over the last few years would calm down.

3:48Now, remember that number's still gone up and we also have to look at the supply side, the amount of rental properties available as well. But I think it's a fair assumption to say if this trend continues and we see similar numbers next year, that rental boom that we've seen over the last few years will be a thing of the past and they will settle down again. But we'll see. It's one piece of data. It doesn't mean everything's now changed, but it is interesting. It could be the start of a new trend. we will see and we'll come to rents a little bit later in the episode but first while we're on the macro let's talk about interest rates and we've got a real good news bad news story here so the good news is the governor of the bank of england andrew bailey has suggested that the bank of england may not need to increase interest rates even if inflation continues to be high as it is now and even if it stays that way as a result of everything that's going on in the middle east the bad news is the reason for this is the economy's got worse so i don't know what we'll to do with this story really so yeah rates may not need to go up but that's because job vacancies have hit a five-year low and unemployment has reached five percent so yeah the economy is getting worse but it's all part of a plan rob it's genius yeah that's that's one word you could use rob um other people may use different words but at the very least i think most people would welcome interest rates not going up unless you're a saver of course but for the majority of people who listen to this podcast they'll be pleased maybe not with the reasons why but with the end result.

5:12And talking of results, we've got the main numbers in for house prices and it's not great reading. The first part of the year we've talked about how sentiment has been so poor and it feels like the data is starting to catch up and reflect that now. So we've got our information in from Nationwide and Halifax. We report on their numbers every month and Nationwide prices were down month on month by 0.6. So we've seen falls now. In April it was up by 0.4 but in May it's fallen by 0.6 which means that over the last 12 months property prices have grown by just 1.7%. Certainly nothing to write home about and less than inflation.

5:57But it's interesting for the first part of the year what we were seeing in the market and what we were talking about wasn't really reflected in the data but yet now because of that lag effect it seems to be catching up so I wouldn't be surprised if June's numbers tell a similar story because it's not just that we've had one bad month of sentiment and Halifax their numbers down by 0.01 for the month so fall's not quite as big but the annual change now is just up by 0.5 over the last 12 months so while the monthly number hasn't moved as much the annual number is lower rob if i was to bet on this which i wouldn't because that would be silly i would expect to see june and july follow this trend as well we'll see where sentiment is going and where it ends up by the end of the year but over the next couple of months i wouldn't be surprised if we saw some small not like crazy drops but some small drops again over the next couple of months yep i think that's probably fair to say and underlying that headline figure is of course something we've talked about many times which is the north-south divide and data from zoopla that came out just last week really shows that this is just getting starker the north south divide is just getting bigger and bigger because there are cities that are growing and there are cities that are growing at three percent a year or more but every single one of those is in the north and there are cities where prices are falling and every single one of those is in the south and when you look at the regional map it's just crazy you've got areas that are doing relatively okay so you've got scotland at three percent northeast 3.4 northwest 3.6 and then you cast your eye down a bit further and the whole of the south is struggling.

7:32London flat southwest up 0.1 southeast down 0.2. It's just incredible and it's something that listeners of this podcast will be well aware of because we talk about it all the time. But I think your average person on the street would be completely unaware of this because obviously most people are fixated on what's happening around them because most people are only interested in the value of their own home. But as an investor this is something you have to be fully aware of because it has been a trend for such a long time out and there is no sign of it changing now one of the things we do and other property experts will do is they'll make predictions of what's going to happen in the market and we and many others set our stall out for what we believe will happen in 2026 but there is an organization that masters this game and rarely gets it wrong because they've decided that they can change their predictions when they want and they do this all the time throughout the year and it makes us giggle but it's Savills.

8:27Savills again have decided that they didn't like what they put for 2026 because it was going to be wrong in their eyes so they've decided to change it. So they had 2026 property prices growing by two percent Rob but five months into the year they've decided they didn't like that and now they're deciding it's going to be a two percent fall. Now remember they may feel like changing this again later this year it's entirely possible it's savils but rather than just make fun of their changes it is interesting that they've now made this reassessment and they think the market has changed enough that they do actually need to revise their numbers yeah and they may well turn out to be right because if what you've said you think may happen is likely to happen plays out as in the next couple of months continue to be pretty negative we see another couple of small falls then that'll start taking us in that direction i think to be fair to them and to us and to start getting our excuses in rob The Iran war happened after everyone made their predictions.

9:25So I think it's important that we start getting our excuses in as well. And I can understand why Savills have said what they've said. You can make a prediction, but if the world fundamentally changes, which it has in the short term, then you can see how the markets can then move in a different direction. Everybody set their predictions based on those market conditions. Economists like to say, all things being equal. here's our predictions and all things being equal we'll stand by them and i think we and others can go well all things aren't equal things have changed well that's right but if you look at the full five-year forecast which is what they do is they basically play around with what's happening at the short end but hasn't changed the shape of how they see things playing out over five years which is ultimately 18 and a half percent average uk house price growth by 2030 so now it shows a negative of 2026, growth in 27, really accelerating into much stronger growth in 2028, 9, 30.

10:21And the mirror of that is the base rate. So they see interest rates coming down, and that's the driver of prices going up. And that again, plays back into the Iran situation, right? Because we thought that rates were going to be coming down this year, and now it looks like they're not. So it all ties in. But this is a story that we'll come back to, because maybe that longer part of the forecast is too optimistic. Maybe there's a case that prices are going to fall more substantially. But you also have to look at this in the context of what we've called the silent property crash. So we'll come back to this story probably next week and start putting a lot more numbers and data around it.

10:52So stay tuned for that one. Yeah, definitely tune in for next week's episode. It's a must listen to. It really helps you understand what is happening in the market. It's something that's just not talked about elsewhere, but we do it on the pod and next week's episode is an absolute must listen to. The good news is though, because it feels like a bit negative this record so far, but the good news is that mainstream lenders have finally started to cut their rates. So what happened? Well, the Iran war, as we talked about already, swap rates spiked. There's volatility, which meant that lenders pushed their rates up, even though interest rates hadn't changed.

11:25The rate that they all borrow at had changed for them. So they passed it on to all of us as homebuyers and investors. And although, like I've said, interest rates didn't move up, all our borrowing rates did move up. Well, that trend has been reversing now and continued to reverse, and that's really good news. And Nationwide have made their third rate cut in a fortnight. So they've been aggressively cutting, and others have repriced down as well, Halifax, Santander, and others. So this is good news, Rob. This is what you would expect to see once the volatility goes away. You could go, the war hasn't gone away but it's not the wars themselves it's the unexpected we've had the ukraine russian war for a long time now but it's become unfortunately the norm and the iran war has been happening for a while now so the markets have just started to settle around it and that's been reflected in the rates yeah and this is why we've been talking so much about buying off plan which is something that we've been focusing on with our clients at property hub invest because at the moment if you're buying a property you need to arrange a mortgage right now then last week this week next week your mortgage rate could bounce around all over the place now over the long term that doesn't particularly matter as long as you're profitable at the start and you're getting a strong deal you'd expect it to all come good at the end but if that is something that you're nervous about then if you can lock in the price today at a point when there are deals to be done but you don't have to worry about the mortgage until later in the year or next year then you'd expect this volatility to be behind us and mortgage rates to be looking better even if the base rate hasn't yet come down.

12:58Now one of the reasons that we are getting such strong deals at Property Hub Invest at the moment is because, as we've talked about on the podcast recently, developers and house builders are not doing well. They're having a really tough time and that will be starting to feed through into housing supply or rather future housing supply because it's not good news for the government's house building target because not only are planning applications not going up, they're going down. And in fact planning applications have hit a record low ahead of the population. No, it's not good news. And the key number of all the planning numbers that we'd look at here is the new build application.

13:34So the amount of new properties come into the market, and that's down by 5.5 % year on year. So the number wasn't high enough anyway, but now it's come down even further. And remember, not all applications get built anyway. So people or developers will go and get planning, but not always then go and immediately deliver it. But the fact that they're not even putting as much planning in is a really bad sign. And that means that Labour's targets, as you've said, Rob, are a distant dream now. Remember, they want 1.5 million homes to be built. It's not going to happen. It's just not. That target's over.

14:11It's a fantasy now, that number. And this is also reflected in confidence numbers. And a construction PMI, which is a confidence number, it's measured what the level of confidence the construction industry has right now. It's fallen from 39.7, which was a low number historically, to 38.2, which is the sharpest contraction since May 2020. And it's the 17th straight month that it's been below 50. And in particular, because construction industry is a big industry, right, the house building segment was the weakest. So again, when you dig into the numbers that impact the market, house building was the weakest new build applications down again and again I'd expect these numbers to fall further over the next couple of months the confidence levels and I'll repeat again but what we've been talking about for the last few months is now finally catching up with in the data and that's why I love this show I really do because we're putting everybody on advance warning of what you're going to see in the news or in the data ahead of time because we're on the ground we're dealing with developers we're dealing with investors we know exactly where people are at what areas people are interested in where sentiments are who's feeling bullish what areas performing well which areas aren't we get all that in the moment each and every day and we can bring that information to you and then it's shown a few months later in the data and based on what we're seeing and experiencing with the developers with investors we would expect this to continue for next few months sentiment is really low in the construction industry.

15:47I'd actually say investors have started to get more curious because they're realizing there's deals out there. We're seeing investor interest and that was reflected in some numbers we talked about in the last few weeks but no developer at the moment is trying to pretend things are going well. In the past if it was a bit of a slow quarter they'd put a brave face on it and just pretend it was fine but now everybody is transparent nobody can spin this one the sentiment amongst all the home builders is rock bottom that's reflected in their share prices that will change at some point because we go through these cycles but it's an interesting dynamic at the moment and as we've talked about on this podcast it absolutely creates opportunity as well let's come on to rents and look at what's happening there and what's happening there is basically exactly what you'd expect given what we've talked about on the show so far.

16:39So we talked about migration falling. So that's easing pressure on demand. But also we've got constrained supply. We know that landlords are exiting. We know that not a lot is getting built. And as a result, what you're seeing is rents going mildly up. So again, when net migration was at its highest around about 2023, we were seeing pretty much double digit rental growth. That is not the case anymore. According to the ONS May 2026 figures, the average private rent is up 3.5 % year on year. So the average across England is now 1 ,438. Again, that's so high there was an average. I remember it was 700 and something.

17:13I mean, I know we've been doing this show for a long time, but even so the average has rocketed up over the last few years. Again, North-South divide. So the highest rental growth is at the Northeast, 6.5 % growth. That's really, really high. The lowest, no prizes if you want to guess that one, Rob. I don't even need to open the news story, Rob, because I just know it's London. Am I right? Yep, it is. 2 % growth in London. Okay. And finally, there's been real interest in what impact Renters Rights Act is having on landlords and investors. And we talked about this in last week's episode, but Handel's Banking, Niche Lender has tried to put some data together on this as well.

17:52And admittedly, it is a small sample group, just 200 professional investors. but still it is interesting because they are professional investors and 93 % of them expect their portfolio value to rise over the next 12 months which is really interesting that there's that much confidence there from professional investors and you may think well it may be always high because they're professional investors but that's up from 54 % just a year ago so the strength of conviction at the moment is really high and 84 % of those landlords plan to increase their holdings, so buy more property in the next 12 months as well.

18:28Again, a really, really strong number. But because they're professionals, I guess it makes sense. If you can see opportunity now, because you're a professional investor, then why wouldn't you take advantage of this market? So while we talk about it and say it, it's fascinating to see it backed up with data, and those investors having such strong conviction, but they can just see the opportunity that's being presented to them right now. We've got great yields, we've got prices that have softened, and we've got opportunities to get ourselves incredible deals. And professional money, which this is, is taking full advantage of that.

19:03Yeah, and a driver for that expansion is the buying opportunities that they're seeing. And 70 % specifically mentioned the buying opportunities that they are expecting to see from amateur landlords who are getting out. So it's very much the shift that we talked about before. And it gives me another chance to use one of my favourite words bifurcation what a great word that is that is it for the market update though we've brought you up to speed with everything that's happened over the last month but remember we keep you up to date weekly as well if you're not already subscribed to our free property pulse newsletter on a friday make sure that you head over to propertyhub.net slash pulse and sign up there because we bring you every week not just the biggest stories of the week but also our interpretation what we're seeing what we're seeing beneath the headlines so you can get all of that in your inbox every week right before we wrap up let's go to hub extra rob what have we got this week this week we've got a solution or a potential solution to one of the most annoying things in the world of work and tech which is two-factor authentication codes whenever you think you've logged in but then you have to come up with a six-digit code for somewhere and it's super annoying but super important something you can do though instead of having to type in a code is to get an actual physical device so a device that you can plug into your laptop or tap onto your phone it uses nfc to effectively verify that you are you without having to put the code in what guided me towards this was not just the convenience advantage but i was getting increasingly paranoid about what would happen if i lost my phone because all my logins for everything are tied to an authentication app on my phone so if i lose my phone then i am truly screwed so i've started setting up something called a yubikey y-u-b-i-k-e-y which i've known about for years and years and years but it's not really done anything about finally got myself one and it's really really easy to set up the great thing about it is whereas your two-factor thing is normally just on your phone so if you lose your phone you're screwed you can get yourself two yubi keys carry one around with you put the other one in a safe or leave it at home so if anything does happen you're still backed up so not the most exciting hub extra of all time it's not a new fancy ai thing that you can mess around with but it's giving me peace of mind and so we will link to that in the show notes.

21:05That's just done for another week. Make sure you join us next week as Rob's already alluded to. It's an episode on the silent property crash or the property crash, perhaps in general, that is going to be a must listen to. But until then, take care, have fun. Bye bye.